Report on Competitive Business Environment
Added on 2020-04-07
26 Pages6478 Words83 Views
Running head: MBA ASSIGNMENTMBA assignmentName of studentName of UniversityAuthor note
1MBA ASSIGNMENT
2MBA ASSIGNMENTExecutive summaryThe report was prepared to analyse the competitive business environment by using thePorter’s five forces model to determine the threats of new entrants, substitutes, competitiverivalries, bargaining power of suppliers and customers. The differentiation strategies werechosen as effective for sustaining in the competitive environment and with the acquisition ofAirTran airways, the organization gained a sustainable position. The value chain analysis modelwas also used to understand the core competencies, capabilities, which further strengthened theability of the company to sustain in the marketplace. The maintenance of a flexible and stringculture and by acquiring AirTran Airways, the company entered new markets and gained moreprofit in business too.
3MBA ASSIGNMENTTable of ContentsIntroduction......................................................................................................................................3Question 1: Porter’s five forces model used by Southwest Airlines...............................................4Question 2: Internal analysis by Value chain framework................................................................8Question 3: Impact of organizational culture on the strategic choices..........................................13Question 4: Benefits and drawbacks of acquisition of AirTran Airways......................................15Conclusion.....................................................................................................................................18References......................................................................................................................................20
4MBA ASSIGNMENTIntroductionThe main aim of preparing this report is to analyse the competitive environment wherethe business organization named Southwest Airlines has been operating. It will help inidentifying the capabilities, core competencies and other factors that can contribute to the makingof strategic choices and decisions at both corporate and business levels. The information aboutthe company has been derived from various external sources and is being assessed to determinethe efficiency of the business processes managed by the company to become successful andprofitable all throughout. Porter’s five forces model will be used to understand the level ofcompetition and determine how strategies can be formulated by the organization to sustain in thebusiness. The company to analyse the strengths, capabilities, core competencies and the weakareas where improvements will be needed to be done also utilizes the Value chain framework.The choice of competitive strategy will be based on the differentiation, hybrid or cost leadershipprocedures (Allio & Fahey, 2012). The culture of the organization will be focused on as well foridentifying the strengths and weaknesses of the company and furthermore discuss the positiveeffects created by the acquisition of AirTran Airways (southwest.com, 2017).
5MBA ASSIGNMENTQuestion 1: Porter’s five forces model used by Southwest AirlinesThe Airlines industry in United States change from time to time and this enabled theAeronautics board to regulate the airlines routes and set proper prices of the services delivered tothe customers. There are mergers and acquisitions too, which has resulted in enhancing themarket share by attracting more customers and this created a sustainable place in the market. Dueto the inappropriate management of airlines rules and regulations, the fares of services were notset properly and this created scopes for other companies to enter the market and target marketsegments (Antràs & Chor, 2013). Nowadays, with the failing of air fares and high level ofcompetition, the demands for airlines travel have also increased. To conduct the externalanalysis, the Porter’s five forces framework is used to understand the level of competition in themarket and examine the structural factors that have acted as major forces in driving the businessprocesses (Berchicci, 2013). Southwest Airlines is one of the most popular airlines company that has been operating inboth domestic and international areas by providing airlines services at a relatively lower costcompared to the competitors in business. The Porter’s five forces model is used by the companyto analyse its competitive position in the market and understand the effects created by theexternal forces such as threat of new entrants, competitive rivalries, threats of substitutes,bargaining power of suppliers and the consumers (Bock et al., 2012). Threat of new entrants The business organization has gained high economies of scale that has created enoughopportunities for the company to obtain greater market share. Huge amounts of investments aredone, which has enhanced its brand name and image and furthermore allowed the company to
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